Increasing milk production expected to keep dairy prices low
USDA is projecting an increase to 2020 milk production as expected growth in milk per cow offsets a smaller herd but says it could decline next year with slower growth in cow numbers.
In its August supply and demand report, USDA forecast 2020 cheese, butter, and nonfat dry milk prices lower while the whey price was unchanged. The 2020 Class III price was lowered on lower cheese prices and the Class IV price was lowered on reduced butter and nonfat dry milk prices forecasts.
The 2020 all milk price was lower by $0.30 to $17.95 per hundredweight.
The 2020 export forecast on a fat basis was raised because of increased shipments of cheese and butterfat products. The skim-solids basis export forecast was raised on higher exports of dry skim milk products.
USDA forecast 2021 cheese and butter lower and raised the whey forecast, nonfat dry milk prices were unchanged. The Class III price was lowered on lower cheese prices more than offsetting higher whey prices. The Class IV price was also lowered because of lower expected butter prices.
The 2021 all milk price was unchanged at $17.05 per hundredweight.